Conn. hedge fund says loss was heavier than reported

By Associated Press | September 22, 2006

HARTFORD -- A Connecticut hedge fund that bet heavily on the natural gas market lost almost $6 billion over the past month, partly because it sold other assets at a loss to stay afloat while its gas investments plummeted, the fund told investors in a letter.

Amaranth Advisors said in a letter late Wednesday that the fund lost about 55 percent of its year-to-date assets, and about 65 percent month-to-date as of Tuesday. That is higher than the estimated 35 percent year-to-date loss disclosed earlier this week and leaves the hedge fund's assets below $3.5 billion.

The company hit a high in August of $9.2 billion .

It said Wednesday that it had transferred its energy portfolio to a third party, but has not identified that entity. Amaranth's founder and chief executive, Nick Maounis, said selling off some assets in the fund's other portfolios, along with the transfer, helped avoid liquidation.

Fund officials plan a conference call today with investors and will schedule one-on-one discussions, he said.